Eastern Coal Holdings (NZ) Limited

Galilee's New Zealand coal strategy

The Company, through subsidiary Eastern Coal Holdings (NZ) Limited (Eastern) has established itself as a coal producer in New Zealand where it plans to develop a substantial coal business.

New Zealand is attractive due to the export of extensive in-ground and unique quality coal resources. The New Zealand coal industry is growing strongly to meet the nation’s increasing energy requirements.

There is a long tradition of mining in the country, the geology is well known, there are extensive in-ground coal resources, the industry has a high degree of professionalism and the government provides experienced, efficient regulation that encourages exploration and development.

These factors present real opportunities for Eastern. The barriers to entry into coal mining are low. Whether considering acquisition or project development, the company can find existing mines and potential projects that are manageable in scale. This allows for immediate or early cash flow to be achieved, and the growing demand for coal both domestically and overseas provides the right conditions for ready expansion.

Eastern operates the Cascade and Takitimu coal mines in New Zealand. It is also assessing a coking coal development opportunity at Whareatea West near Cascade and intends exploring around the Takitimu / Ohai area. The Company also operates a coal handling and distribution yard strategically located approximately equal distance from the Cascade and Takitimu mines, and close to the large industrial users in the South Canterbury region. Other potential acquisitions are under consideration, with the objective of expanding Eastern into one of New Zealand’s major coal producers.